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While making the note more complete in terms of metadata, it's redundant because it's supposed to be a personal wiki. Only one person is the assumed owner of them.
29 lines
1.4 KiB
Org Mode
29 lines
1.4 KiB
Org Mode
#+title: Accounting basics
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#+date: "2020-11-15 05:10:51 +08:00"
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#+date_modified: "2020-11-15 05:11:23 +08:00"
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#+language: en
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Accounting is knowing how much we have.
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Bookkeeping is the practice of tracking and classifying various financial moves.
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Bookkeeping can make financial management less stressful (and some might say, enjoyable).
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You can easily know what you have: disposable income, loans, credits, etc.
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On the other hand, it is also legally required for business to keep track of it.
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In accounting, the basic unit of operations are *transactions*.
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Transactions are seen everywhere — you've done a transaction when you've bought your laptop, ordered some food, delivered a package, etc.
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To make a transaction, an *account* is used as a marker or label for the two sides.
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For example, a transaction for buying a laptop with cash is made of two accounts for the cash and the laptop.
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In personal financing, there are said five common accounts:
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- Assets which are composed of your bank account, wallet, real estate, and investments.
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- Liabilities which is something you owe (e.g., mortgages, loans).
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- Income, another term for revenue, is your paychecks, received gifts, and interests.
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- Expenses including groceries and bills, given gifts, and donations.
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- Equity is everything else.
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Each transaction is made up of two components usually referred as *debit* and *credits*.
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